OxfordAQA IGCSE Business: Influences on Business (9225)

This guide covers Topic 2 Influences on Business, one of the six topics of OxfordAQA International GCSE Business (9225), first teaching September 2020, first examined May/June 2022. It looks at how forces outside a business’s own control — technology, ethics and the environment, the economic climate, globalisation, the law, and the competitive environment — shape what a business can and should do.

Where this fits in 9225

Topic 1 (Business in the Real World) establishes what a business is and why it exists; Topic 2 turns outward to the environment a business operates in and how it must respond and adapt to forces it does not control. This external focus recurs through Topics 3–6 (Business Operations, Human Resources, Marketing and Finance), each of which assumes some understanding of the pressures Topic 2 introduces.

Syllabus coverage

OXFORDAQA INTERNATIONAL GCSE BUSINESS (9225) — TOPIC 2 INFLUENCES ON BUSINESS

• 3.2.1 Technology — the impact of changing use of Information and Communication Technology (ICT) on business activity; how businesses use e-commerce to access wider markets; digital communication with stakeholders, including relevant examples such as email and video conferencing
• 3.2.2 Ethical and environmental considerations — identifying and analysing possible trade-offs between ethics and profit; understanding that ethical behaviour requires acting in ways stakeholders consider fair and honest, including religious observance and charitable giving; environmental considerations such as traffic congestion, recycling, waste disposal, and noise and air pollution; sustainability considerations including global warming and the use of scarce resources, and possible trade-offs between sustainability and profit
• 3.2.3 The economic climate on business — how fluctuating interest rates affect businesses that rely on overdrafts and loans, and affect consumer and business spending, including Sharia-compliant alternatives; how changes in the level of employment affect businesses; how demand for products and services changes as incomes fluctuate
• 3.2.4 Globalisation — forms of globalisation including specialisation by country, relative cost advantage, movement of labour, larger markets and international competition; benefits and drawbacks of globalisation for businesses and economies in developed and developing countries; the impact of exchange rates on the profit and sales of importing and exporting businesses, and the effects of severe exchange-rate fluctuations (calculation of exchange-rate conversions is not required)
• 3.2.5 Legislation — assessing the impact on businesses of employment law, health and safety law and consumer law, including cost, training needs, recruitment and the consequences of non-compliance; the benefits and drawbacks to businesses of laws requiring a safe working environment and a national minimum wage; how consumer protection laws affect businesses
• 3.2.6 Competitive environment — what is meant by a market and competition; analysing the potential impact of competition on businesses, including situations of minimal or no competition; the risks and uncertainty all businesses face and why entrepreneurs take them on; how developing-country businesses compete with developed-country businesses, for example through lower cost advantage

(Numbering above follows the 9225 specification’s own scheme, section 3.2 Influences on business, sub-sections 3.2.1–3.2.6.)

How to approach it

The six sub-topics are genuinely distinct external pressures, but exam questions often ask candidates to weigh two or more of them against each other for a given business scenario — for example, whether rising interest rates (3.2.3) or new environmental legislation (3.2.5) poses the bigger risk to a specific firm. Revise each sub-topic with a short list of real or plausible business examples attached, so you can pull on concrete evidence rather than restating the theory in the abstract.

Ethics and legislation are easy to blur together but are assessed differently: legislation (3.2.5) is what a business is legally required to do, while ethics (3.2.2) covers what a business chooses to do beyond the legal minimum because stakeholders consider it fair or honest. A strong answer on an ethical dilemma explains the trade-off with profit explicitly, rather than simply asserting that acting ethically is “good for business.”

For globalisation and exchange rates, focus on cause and effect rather than memorising definitions: a weaker home currency makes a country’s exports cheaper for foreign buyers and imports more expensive at home, which helps exporters and hurts importers — reversing the direction of the exchange-rate movement reverses which side benefits.

Worked example: interest rates and business decisions

A candidate is asked to analyse the impact of a rise in interest rates on a small manufacturing business that relies on a bank loan to fund new machinery.

Direct effect:   Loan repayments increase, raising the business's fixed
                 costs and reducing profit available for reinvestment.
Indirect effect: Consumers face higher costs on their own borrowing
                 (mortgages, credit), so disposable income falls and
                 demand for the business's products may fall too.
Combined effect: The business faces higher costs and potentially lower
                 revenue at the same time -- a double pressure on
                 profit.

A strong answer distinguishes the direct effect on the business’s own finances from the indirect effect that works through its customers’ spending power, rather than treating “higher interest rates are bad for business” as a single, undifferentiated point.

Common mistakes

Stating that an influence “affects the business” without explaining the mechanism by which it does so. Treating ethical behaviour as costless, without acknowledging the genuine trade-off with profit the syllabus asks candidates to identify. Confusing globalisation’s benefits to consumers (lower prices, wider choice) with its benefits to producers (larger markets, lower-cost inputs) as though they were the same thing. Assuming legislation always harms a business, when compliance can also create a level playing field against competitors who might otherwise undercut on safety or pay.

Quick revision checklist

• Attach a real or plausible business example to each of the six sub-topics rather than revising them as abstract definitions.
• Keep ethics (choice, stakeholder fairness) and legislation (legal requirement) clearly distinct.
• Be able to explain, not just state, how a change in interest rates, employment or exchange rates affects a business.
• Practise weighing two external influences against each other for a single business scenario, since exam questions often combine sub-topics.

Official syllabus

OxfordAQA International GCSE Business (9225) specification — oxfordaqa.com.